The Service Portfolio describes the commitments and investments made by a service provider to its customers across all market spaces.  In a nutshell, it states what the company is able to do and how it will do it while also accounting for previously agreed upon commitments.  The Service Portfolio also talks about new products and services as well as ongoing service improvement projects and other third-party services which are utilized by the business in providing their service.  The Service Portfolio is the defacto guide to what the business can and cannot do.

Ensuring that the Service Portfolio is accurate is one of the important roles of Service Portfolio Management (SPM).  This role ensures that new services are added only after funding has been approved an appropriate financial plan is in place for recovering costs and/or showing a profit.  This is sometimes called a rally point process or other similar names but in essence its a way of ensuring that the business always has a pipeline of new products and services available to meet current and future demand.  The service portfolio should have the right mix of services in the pipeline and catalog to secure the financial viability of the service provider since the service catalog is the only part of the portfolio that lists services that recover costs or earn profits.  You can find a lot more detail on Service Catalogs at either of the links provided below.
The service pipeline, similar to a sales pipeline, list perspective, and future projects and services - i.e. those products that are currently being considered or thought about, but are not yet available to the consumer.  The service pipeline is a future looking document that provides guidance to senior leaders and while elements of this might be made available to the customer (for future prospects generally), it is not normally published as that tends to give the competition too much of an insight into the organization's future plans and strategies.

The service catalog, however, is different ... this document is generally published (& publicized) quite widely as it is the single place where all information about products, prices, ordering and request processes are documented.  It defines and communicates the policies, guidelines, and accountability required for the service provider to deliver and support services to its customers. The service catalog details each service and shows the service components that make up each one. It also provides an overview of the assets, processes, and systems involved in each service.

While you might consider the service catalog to be just that ... a catalog of services, it can also be used to identify gaps in services and linkages between services.  This information can be used to realize new services and products for future exploration and exploitation by the business.

Retiring Services

While the common thought is that the latest and greatest is always the best (look at the mobile phone market if you don't believe me or understand what I'm saying) the service catalog should maintain a place for retired services also.  These are services that while no longer as "popular" (in call center and tech support worlds that would translate to "getting fewer calls") still have value to the business for a variety of different reasons including:
  • The replacement service might not meet all requirements, and it is important to be able to fall back to the previous service 
  • There is a significant portion of the market made up of the planned to retire service which will still need future support and/or maintenance
  • When defining a new service, service portfolio management might discover that some functionality is available from a retired service. This might result in the service being reinstated as part of a new service 
  • There might be regulatory requirements to maintain archived data that can only be accessed using the previous service, in which case information is exported to a read-only database for future use
It is the job of Service Portfolio management to determine how long a service should remain in the Service portfolio - and while this is often determined based on time, in many cases other reasons are utilized to make this decision.

Service Portfolio Launch

Service portfolio management is guided from strategy management for IT services via strategic plans which provide details of new business opportunities and which services are required to fulfill those opportunities.  SPM is responsible for reviewing each opportunity and determining the required investment level and also whether or not the opportunity is achievable (regardless of the potential profit that "might" be realized).

The role of Improvement in determining a Portfolio

Continual Service Improvement (CSI) has some input into SPM also, specifically:

  • Opportunities to improve the performance or service level achievements of services in the portfolio
  • New opportunities within the current strategy, or gaps in the current portfolio of services
  • Opportunities for overall improvements in cost, mitigation of risks etc.  
By taking into account perceived deficiencies in the Service Portfolio, CSI is able to make recommendations for improvement, however, it is still the responsibility of SPM to evaluate these suggestions and determine whether or not the potential improvement warrants the investment.


The creation of a Service Portfolio follows several clearly defined (no pun intended) steps as shown in the diagram to the right.  The Define step talks about desired business outcomes and opportunities as well as what services are needed to realize these opportunities and the investment required.

Any new strategy or change to an existing strategy should be submitted to Service Portfolio Management. This will be in the form of strategic plans, identified market spaces and outcomes, priorities and policies. These will be used to identify specific service opportunities and the stakeholders that will be consulted in defining the services.

The role of SPM at this stage is to define the service based on the information provided:

  • The purpose of the service (what it must achieve)
  • The customers and consumers of the service
  • The major inputs and outputs of the service
  • High-level performance requirements (for example, when it needs to be available)
  • What business activity will it support, and is that activity stable or dynamic?
  • Does the service need to comply with (or enable the business to comply with) any regulatory or legal requirements?
  • Are there any standards that need to be applied to the service?
  • What are the actual business outcomes that the service will be supporting, and who is responsible for these outcomes?  
  • Are there any other stakeholders that need to be involved in defining and evaluating this service? 
  • The anticipated level of investments and returns. Although these will not be known, the customer will know what type of return they need, and how much they are prepared to spend to achieve it 
  • Are there any constraints that need to be considered (e.g. budget, resources)?
The role of SPM is to understand how all of the different components fit together and complement each other and also to define the boundaries of the service as well as the technical stakeholders.  Based on this analysis, the impact on the Service Portfolio can be determined and this will provide information on the following areas:

  • The current business outcomes 
  • Investment levels 
  • Service Level Agreements and contractual obligations 
  • Warranty levels 
  • Existing required Utility (for example, changing an existing service may benefit one customer, but it might negatively impact another) 
  • Is there another existing service that can be combined with this service to deliver the required Utility or Warranty? 
  • Patterns of business activity, and levels of demand on the service


The analysis of each service moving through the Service Portfolio Management process is performed by linking each one to the Service Strategy. For external service providers, this will be a linkage to the organization’s overall strategy. For internal service providers, it will mean linking to the IT strategy and the strategies of the other business units.


In a similar fashion to interviewing and hiring people - the hardest and most expensive exercise is getting the right employee - getting people back into the door is exactly the same.  You want that repeat custom as that is what will save you money in your marketing and advertising.  One of the key components to this in addition to the quality of the product itself is the customer service that you provide to the customer in their purchasing and ordering decisions.  You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of those customers to come back, your business won't be profitable for long. Good customer service is all about bringing customers back. And about sending them away happy - happy enough to pass positive feedback about your business along to others, who may then try the product or service you offer for themselves and in their turn become repeat customers. 

Good customer service should be thought of as relationship building and networking.  It's easy to think of a good salesperson as being the driver of a business, but in reality, anyone can sell something - once - its the way in which something is sold and the service you provide after its sold that will help you build that relationship.

"You will be judged by what you do, not what you say." 
If you truly want to have good customer service, all you have to do is ensure that your business consistently does these things: 
  1. Answer your phone. If you don't speak to your customers, you won't know what problems they are having and you won't be able to help them fix them.  Hire the right people that have the right knowledge and make sure you have enough of them as keeping your customer on hold is NOT good customer service.
  2. Keep your commitments.  If you tell someone you will find out the answer or will call them back, make sure you find out the answer and you call them back! Reliability is one of the keys to any good relationship, and good customer service is no exception. Think before you give any promise - because nothing annoys customers more than a broken one. 
  3. Listen. I've spoken about this before in previous posts (here) but one of the most frustrating things - especially for customers not happy with you - is forcing them to repeat themselves.  Irate customers especially can become infuriated when they find themselves transferred from person to person constantly having to explain the same issue over and over.  It is imperative to use active listening skills and show your customer that you are paying attention by making the appropriate responses at the right times.
  4. Complaints - no one likes complaints.  After all, most people are already trying to do their best and don't like being told that it isn't meeting the objectives they set out to address.  However, customer complaints are an opportunity to hear not only about what you might have done wrong now but rather an opportunity to learn what you might do right in the future!   Many of us have developed a reflex shrug, saying, "You can't please all the people all the time". Maybe not, but if you give the complaint your attention, you may be able to please this one person this one time - and position your business to reap the benefits of good customer service. 
  5. Help out - sometimes it really is the little things that make a difference.  Providing directions or parts at a nominal charge might not earn you revenue now, but it could help make that customer someone that will come back in the future when they know that you have the knowledge and skills for their problem.
  6. Training - While having the phone answered on the first ring is a laudable objective if the person on the end of the line has no knowledge of your product or service it doesn't really accomplish your objective.  You need to train your team in your products and services as well as the value of good customer service. Most importantly, give every member of your staff enough information and power to make those small customer-pleasing decisions, so he never has to say, "I don't know, but so-and-so will be back at..." 
  7. Give them the pickle - sorry I know that's a bit of strange turn of speech, but in some customer service training I once took its something that was taught and it stuck with me.  Giving them the pickle means going that extra mile... for example if someone asks where something in the store is - don't just point them to the aisle ... take them there and show them the item they are looking for + other alternatives that might be better! 
  8. Give them more than they are asking for - if you want them to come back, give them a reason to come back.  It can be a small coupon, it can be something that will help with whatever they've just purchased.  It doesn't have to be expensive or large, but it should be useful.
If you apply these eight simple rules consistently, your business will become known for its good customer service. And the best part? The irony of good customer service is that over time it will bring in more new customers than promotions and price slashing ever did!

Defining a Service

Now I started this post talking all about good Customer Service, however, something that isn't often discussed is how you define a service (product) in the first place.  Its all well and good to have good customer service, but if you're selling something that the market isn't interested in, you won't have any customers TO service!  If you're a reader of this blog, you'll know that I'm a huge fan of ITIL and its methodologies ... fortunately, ITIL can help here too and by a happy coincidence, it also has an 8 step plan!

    1. Define The Market & Identify Customers - who is your target market & demographic (i.e. who would be interested in your product or service and who do you want to sell to)? By identifying the market it will simplify the decision about the products or services of interest and will help you identify the customers that would be interested in your product. Markets can be defined by industry, geography, demographics or a host of other factors.
    2. Understand the Customer - knowing what your customer wants is essential to providing him with a solution to his demands.  For Type I and II organizations providing service to internal clients, this means understanding what the business is trying to accomplish, what the overall business goals of that business are and how these outcomes can be achieved.  Type III (external) service providers need to understand why they are purchasing that service and what products or services are key in achieving the objectives.  Understanding the customer involves understanding what they want to do, what their constraints are, how will they know that it has been successful etc...
    3. Quantify The Outcomes - I've spoken at length of the importance of measurement.  This is absolutely essential if you are providing a service to someone or purchasing a service from someone as the only way you will know whether a service meets desired outcomes is by knowing in advance what your targets are and by measuring, how close you are to reaching those targets and objectives. Defining outcomes is an important part of defining services, but customers often take it for granted that everyone understands their particular outcomes because they work on them as a matter of routine. It is therefore important that the service provider works with the customer to quantify each outcome, and document it as part of the service description that will be entered into the service pipeline.  As mentioned earlier in this post, complaints (not achieving outcomes) are not only a way for the customer to blow off steam, but are also a way for the provider of that service to improve in clearly defined ways so that they are better able to provide that service to the complaining customer and also to other customers!  Therefore it is important to review the achievement of outcomes regularly, both to ensure that the service provider is not missing an opportunity, and also to ensure that current outcomes are being delivered.
    4. Classify the Service - this could be somewhat confusing in ITIL terms as they talk about service archetypes and service utility etc... To put it into somewhat simpler English, think of this as defining a subset of resources that will meet a specific customer demand.  By combining a specific resource with a specific demand, you've built a specific service which you can then market and sell.  In this way, not only will you know what the service is but you will know who your customer is and also what internal resources you will need to devote to them.  This type of mapping is extremely useful as it will enable you to service not only your current customers but also through some simple analysis, future markets, and customers also!
    5. Understand the Market - OK you should by this point, have a good idea of your customer as well as what they want and how you are going to give it to them.  You've basically already completed this step, but by taking it just that little bit further you can define the market space in general vs. just the one specific customer.  Each customer has a number of requirements, and each service provider has a number of competencies. These intersections between the service provider’s competencies and the customer’s requirements are called market spaces.  More formally, market spaces are the opportunities that a service provider could exploit to meet the business needs of customers. 
    6. Define Services Based On Outcomes - Perhaps somewhat self-fulfilling, but a service should be defined upon what you can provide and what the customer wants.  Having the customer want a rocketship and you providing a go-cart will not be successful and to be honest, offering a rocketship when they only want to pay for a go-cart will probably not work either!  Services need to be cost-effective solutions to problems and need to address the needs of both sides.  See my previous post where I talk about Value and Utility and Warranty as that will really help you understand this concept.
    7. Build a Service model - another place where ITIL perhaps over complicates things (IMHO) in their description, a service model can be used as a template or blueprint for multiple services’.
    8. Define Service Packages and Units - Services may be as simple as allowing a user to complete a single transaction, but most services are complex. They consist of a range of deliverables and functionality. If each individual aspect of these complex services were defined independently, the service provider would soon find it impossible to track and record all services.  When a single service is delivered to a customer it is viewed by the service provider as a service. When two or more services are bundled and sold or delivered together they are viewed by the service provider as a service package.  Service Packages can be defined as core, enabling or enhancing - see my post for further details on this.

    OK lots of information on this one, so apologies if it's a bit too wordy but it seemed to be the best option in terms of knowledge transfer.  As always, feel free to ask questions in the comments.